What Does the AT&T Lawsuit Mean for Fox?

The telecommunication and media industry is adjusting on figuring out what the Justice Department’s litigation to disapprove AT&T Inc.’s acquisition of Time Warner Inc. means for similar deals, some being transformational merger ones and some are consolidations. Additionally, Comcast already owns content from its prior acquisition of NBC Universal. So, the broadcasting giant views the acquisition of some Fox content assets as more aligned with its business lines and objectives, known as “horizontal” deal, relatively there is the vertical merger of AT&T –Time Warner deal. The opposite view is that a Comcast – Fox deal will combine a content provider and a distributor- similar to the AT&T – Time Warner deal that the Justice department is arguing is unlawful. The WSJ reported last week that Comcast was among several suitors in talks to buy Fox’s studio, such as National Geographic. Therefore, the M&A or mergers and acquisitions in the telecommunication & media sector will most likely take a little break to brainstorm on how to alleviate some of the intensely high pressure coming from high tech firms and a trend of consolidations among pay-TV distributors that has left the sector giants of media and telecommunication looking for synergies for a next transformational move.

Analysts and investors are assessing which pattern may be acceptable to antitrust officials. Some argue that the Justice department suit about vertical mergers makes it quite difficult for Comcast to purchase some of Fox key assets, such as Fox’s movie and television studios, which will enable Comcast to be a larger content producer and a distributer which regulators are concerned about. The DOJ is trying to prevent such monopoly, as it claimed one reason for currently blocking such as an AT&T-Time Warner deal is that they will have an absolute leverage that will impact and slow the growth of online video distributers. Furthermore, usually horizontal merger between two content providers faces more stringent scrutiny since it eliminates a direct competitor. If the AT&T-Time Warner deal falls apart, then Time Warner could still possibly be considered for a vertical deal with Fox, since both AT&T and 21^st Century Fox are aligned within the same nature of business, that is mass media contents and entertainment.

https://www.wsj.com/articles/what-does-the-at-t-lawsuit-mean-for-fox-1511384826

Oil Climbs on Signs OPEC Cut May Be Extended

                        

The Saudi Arabian Minister of Energy, Industry, and Mineral Resources H.E Khalid Al Falih says further crude oil production cuts are crucially necessary for the global energy market to rebalance. Crude oil prices gained on clear signs that Saudi Arabia plans to back an extension of OPEC’s deal to reduce global crude oil production. Light, sweet crude rose 2.6% to $56.55 a barrel on the New York Mercantile Exchange. Meanwhile, Brent International crude Benchmark rose 2.2% to a $62.72 a barrel. Many energy traders are anticipating that OPEC (Organization of Petroleum Exporting Countries) and other major producers will announce a decision to extend the production cut deal beyond March 2018 during their upcoming OPEC meeting in Vienna on November 30. Following last year’s meeting, OPEC agreed to cut its crude output in an effort to harness the supply glut and gradually increase crude prices, by also successfully bringing in Russia to join in the cuts deal efforts, which marked a historical milestone considering that Russia is major non-OPEC crude producer. Russia had shown an eagerness to prolong the crude output cuts.

The high level of speculative long positions in the energy market could possibly add some high pressure on OPEC to come out of its anticipated Vienna meeting with an agreed extension to the crude cuts deal. It is noteworthy to mention that anything separate from an extension of output cuts deal past March of 2018 would most likely send crude prices immediately falling. Concerns over increased US shale output returned this week, raising some enquiries on whether the surge in shale output will continue to oversupply the market as other producers pull back. According to U.S Energy Information Administration, US crude oil production rose last week to a record high of 9.6 million barrels, whereas crude stockpiles rose by 1.9 million barrels. This came along a day after the IEA amended or revised its global crude oil demand forecasts.

https://www.wsj.com/articles/oil-climbs-on-hopes-for-opec-cut-extension-1510917441